Canadian economy grows, but quality of life on the decline

OTTAWA -- Canada's economy may well be muddling through, but on a more personal level, Canadians generally are not, a new study of well-being suggests.

The Canadian Well-being Index, led by researchers at the University of Waterloo, shows that quality of life in Canada deteriorated by 24 per cent between the onset of recession in 2008 and 2010.

Canada's main economic indicator, gross domestic product, only declined by about 8.3 per cent over the same period and began to make a turnaround by the end of 2010.

"When Canada's economy was thriving, Canadians only saw modest improvements in their overall quality of life," said former Saskatchewan premier Roy Romanow, who is co-chair of the index's advisory board.

"But when the economy faltered, our well-being took a disproportionate step backward."

The same trend is true over the past two decades, the index of 64 different indicators shows. Most of the indicators are based on data from Statistics Canada.

Between 1994 and 2010, Canada's GDP grew 29 per cent while well-being only inched ahead by 5.7 per cent.

"Despite years of prosperity, our economic growth has not translated into similar significant gains in our overall quality of life, says the report, to be released Tuesday.

"Even more concerning is the considerable backslide Canadians have experienced since 2008."

Researchers have spent years devising a methodology and compiling data to put together the index, which is meant to serve as an improvement over GDP as a measure of how well Canadians are faring.

"GDP tells us nothing about our people, our environment, our democracy, or other aspects of life that matter to Canadians," Romanow and board co-chairwoman Monique Begin state in the introduction to the report.

This is the second year for a full release of all the index's components.

The trends are worrisome, Romanow said, because even though there are bright spots in some areas, the index reveals long-term declines in environment and leisure time, as well as a sharp, sudden drop in living standards.

It also raises serious questions about the quality of health care, education and democratic engagement.

On the positive side, violent crime and property crime are at their lowest levels since 1994, and people feel safe walking in their neighbourhoods. Volunteering is robust, and Canadians generally feel a strong sense of community.

But the environment has always dragged down the index -- a trend that continued during the recession. From 1994 to 2010, the sub-index of environmental indicators dropped 10.8 per cent, including 0.8 per cent in the last two years.

Even though Canadian households are reducing their greenhouse gas emissions, transportation and industrial production have meant a large increase in emissions over the 17 years covered by the index, the report notes.

"Looking at all the data, we see that Canada is creating one of the biggest ecological footprints per person in the world -- a footprint that has increased considerably in size since 1994, up by 17.2 per cent and putting demands on nature that exceed its supply -- raising the question: is this the Canada we aspire to leave our children and our grandchildren?"

Environment Minister Peter Kent has frequently pointed out that emissions have started to fall even as the economy is growing.

The other key drag on the index is a continuous decline in leisure activities. That sub-index is down 7.8 per cent since 1994, as Canadians cut back on visits to national parks and spend less time in arts, culture and other leisure activities.

"Canadians appear less able to protect a part of their lives that they most value and by which they are most enriched," the report states.

But what has alarmed the researchers is a new deterioration in the measurements of living standards and lower scores for health and education -- traditional strengths in the well-being of Canadians.

Living standards rose very slowly during the 1990s and early 2000s, but then plunged with the onset of the recession, the index shows.

"Looking at the last two years, the recession and subsequent sluggish recovery have taken a big toll on our standard of living," the report states.

"The deterioration experienced by so many Canadians speaks to the growing unease felt across Canada and must be taken into consideration as our governments make decisions on how to steer us forward, particularly given predictions of an extended period of weak economic growth."

Basic education scores are still above global averages, but less so than in the past. Regulated daycare spaces continue to be a problem. And while university graduation rates are strong, high rates of underemployment and unemployment among youth are troublesome, the report says.

Romanow said he is worried that the index is pointing to a downward spiral in Canadian well-being that will feed into and exacerbate sluggish GDP growth.

"What we have to do as a nation and society is to develop a consciousness, develop public policies which address this," Romanow said.

The report calls frequently for national strategies to improve well-being in specific areas, and the federal government is best suited to develop such strategies, he added.

But the federal government under Prime Minister Stephen Harper has repeatedly rejected pleas for national strategies in social policy, arguing that the provinces are better suited to deal with regional variations.